Pay yourself first. You've heard this advice so much that you're probably sick of it. It makes perfect sense if you have money, but it may seem impractical if you don't. We all know investing is important; however, it can feel next to impossible when you're on a tight budget. U.S. News reports that putting off savings or investing for even 10 years can have a devastating effect on the security of your financial future, so it really is critical to begin as soon as possible. Even putting away a small amount towards investments each month is better than nothing; those small amounts can add up big over the long term.
Open a free savings account. Shop around at different banks and compare minimum balance requirements and maintenance fees. Savings accounts with low minimum balance requirements and little or no fees are the ones with which you should start, otherwise the costs for the account may eat away at the small amount of savings you're able to accumulate each month.
Research automated savings plans such as the "Keep the Change" program offered by Bank of America. Using this system, each time you buy something, it's rounded up to the next dollar and the extra change is routed to a savings account automatically.
Set up automatic paycheck deductions with your employer and arrange to have the deductions deposited into your savings account. By automatically taking 5 or 10 percent away from your paycheck before you receive it, you'll force yourself to spend only what's left for everyday bills and fun.
Search online for beginner investing services, such as ShareBuilder, which allow you to automatically put aside as little as $20 per month to invest in the stock market.
- Some employers offer 401k retirement accounts and they'll match some of your investments. If you choose to put aside 3 percent of each paycheck for example, your employer may add another 3 percent. This can be a faster way to start investing automatically, without biting too deeply into your household living budget.
Kathy Burns-Millyard has been a professional writer since 1997. Originally specializing in business, technology, environment and health topics, Burns now focuses on home, garden and hobby interest articles. Her garden work has appeared on GardenGuides.com and other publications. She enjoys practicing Permaculture in her home garden near Tucson, Ariz.